ASHLAND - As the town tackles next year’s budget and a major roof replacement project, a recent report says Ashland is in good shape, financially.

Financial services company Standard & Poor’s upgraded the town’s bond rating from AA- to AA+, one step away from the company’s top rating.

This is the town’s second upgrade in four years, and Michael Herbert, assistant town manager and finance director, said it's a good sign.

“It’s an affirmation from an objective source,” said Herbert on Monday.

S&P announced the bond upgrade on March 7. In its report, S&P highlighted Ashland’s economy, budgetary flexibility and strong management.

“It is ... a strong signal to the community as a whole and the families and businesses considering moving into Ashland that the town has been and is still a strong and financially well-managed community,” said Town Manager Anthony Schiavi in a press release.

As residents get ready to vote on a debt exclusion for three local school roof repairs next week, Herbert says this bond upgrade shows the town is ready to take on these projects.

“It should instill faith in the voters and citizens that their money is being used wisely,” he said.

Ashland will have a special town election on March 18 to determine whether it should use a debt exclusion to pay for roof repairs at Warren School, Ashland Middle School and for the town's share of repairs at Keefe Technical High School in Framingham.

Fall Town Meeting approved a transfer of $1.5 million into a rainy day fund, bringing the account’s balance up to $3.2 million, well beyond the amount required by bond rating agencies.

The town plans to use this money to speed up the payment process for a $21 million debt incurred in 2003 and 2004 for the new high school, town hall renovations and various water and sewer projects.

This change should also help decrease interest rates on these loans for these projects from 5 to 2 percent, says Herbert.

Having money in reserve gives the town flexibility to take on capital projects such as the school roof repairs. However, setting too much money aside can hurt funding for current programs.

“You’re always trying to find that balance,” said Herbert.

Ashland wants to get a perfect AAA bond rating in the next three to four years, according to town officials. Herbert says the town will have to maintain a conservative budget to meet this goal.

Anamika Roy can be reached at 508-626-3957 or aroy@wickedlocal.com. Follow her on Twitter @anamikaroy.